Etsy sellers on the platform’s transaction-fee hikes

On Monday, fees increased from 5% to 6.5%, a 30% bump.
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· 4 min read

On Monday, Etsy hiked its transaction fees for the first time since 2018—to 6.5%, up from 5%—and some sellers have pushed back. More than 14,000 of them have gone on strike this week, temporarily shutting down their online stores, and 48,000+ buyers and sellers have signed a petition opposing the fee bump.

“The problem is not so much necessarily that they raised the transaction fees. It’s the amount they raised them,” Efthemia Hinman, an Etsy seller who is participating in the strike, told Retail Brew.

  • Etsy announced the 30% increase in February.

Paying the price: Hinman said the increase in transaction fees is the latest in a series of costs that have made it more difficult to profit from her sweets shop, Mia’s Sweets Emporium.

  • For sellers making $10,000+ a year, Etsy, in February 2020, started charging at least 12% for automatic ad placements on sites like Google and Pinterest that result in sales. Hinman said she began to see the charge in December, after a successful holiday season. “To add transaction fee increases on top of it, it’s really a tough pill to swallow.”

“Our sellers’ success is a top priority for Etsy,” COO Raina Moskowitz said in a statement to Retail Brew. “We are always receptive to seller feedback and, in fact, the new fee structure will enable us to increase our investments in areas outlined in the petition, including marketing, customer support, and removing listings that don’t meet our policies.”

Hinman admitted she isn’t convinced the strike will change much, but is participating out of principle. Still, she understands that not every seller is in a position to take part.

That’s the situation for Kimberly Keim of Thread and Purls, which sells handmade accessories.

“The sellers who strike will lose income from that week, as well as the next three weeks it takes to get back up in sales, while others who didn’t strike will fill their prime spot in searches,” she told us. Recovering from that “is opening a different can of worms” that Keim says she just can’t afford—despite her support for the strike.

  • She told us her sales have been down 48% since the start of the year—her worst year since 2018— and that she’s heard other Etsy sellers have similarly been struggling.
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Business is business: Nancy Ramsey, an Etsy seller who runs a dessert shop called Diamond Chocolates, is more skeptical. On a practical level, she doesn’t believe the strike will hurt Etsy, given the sheer number of sellers on the platform (5.3 million, according to the company).

Plus, the fees are Etsy’s call: “I understand they’re making beaucoup bucks on us, but they are also a business,” Ramsey said. “I’m a business, too, and I’ve had to raise my rates.”

  • She bumped up her costs in January to offset the cost of materials, which has increased 10%–12% since last year. But Ramsey noted she doesn’t plan to raise them again for the time being, despite the higher transaction fees.

She’s been on the platform since 2011 (initially as the manager of online jewelry store Olive Yew), and said that even with all the policy changes over the years, there’s no better place for handmade sellers, given Etsy’s profile. And for those that don’t feel the same, well…

“This is your choice to be on Etsy, you don’t have to be on it,” Ramsey said. “You have other places you can go to and sell—or open your own website.”

Change it up: Starting her own website is exactly what Hinman is now considering. She also mentioned that there’s a lot of chatter on Etsy forums of sellers taking their businesses to platforms like eBay.

  • “Usually, there is grumbling about every change,” Hinman said. “But I think this one got people.”
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